Canada approves Free Trade Agreement with Colombia

A Canada-Colombia free trade agreement (FTA) is expected to be signed into law here next week, after Canada's Senate voted in favour of the agreement. This will ensure that exports of Canadian pork products and many other food and agricultural commodities will have immediate market-access advantage.

The trade legislation adopted last week by members of parliament must still be signed by Governor General Michaelle Jean, representative of Queen Elizabeth II in Canada.

The Canadian Senate passed the bill despite concerns about human rights violations in the Latin American country, which had held up signing the accord for two years. Both governments must still set a date for the FTA to come into force. In Bogota, president Alvaro Uribe described the move as 'a very good achievement' for Colombia.

Boosting investments
The deal is expected to boost Canadian investment in Colombia's mining and oil sectors, as well as increase agricultural exports, primarily wheat and barley. Canada-Colombia trade topped CAN$1.3 billion (US$1.26 billion) in 2008, according to the latest figures.

The accord contains several annexes on the environment and labour standards, in part due to concerns in Canada over assassinations of union leaders in Colombia in recent years.

These concerns were the primary reason behind US lawmakers' rejection of a similar US-Colombia free trade deal signed in 2006. The Americans felt Colombia's assurances were insufficient.

United StatesThe United States and Colombia also signed a free trade agreement, in November 2006. The US Congress, however, has not yet begun debate on the implementing legislation.

According to Iowa State University economist Dermot Hayes, if the US does not implement its FTA with Colombia, the US will be completely out of the Colombian pork market within ten years because of Canada's FTA tariff advantage.

Inaction
"It is unfortunate that our producers have to pay the price for US inaction on trade," said Sam Carney, president of the National Pork Producers Council (NPPC). "Canada will gain the inside track on future export opportunities in the sizeable and growing Colombian market.

"The sad truth is that the hardest market to gain access to is the one that is lost to competitors. Business relationships between Canada and Colombia will become established, and when that happens, our only hope will be if we can offer a more competitively priced product," Carney said.

"But that will be virtually impossible if Colombian tariffs on Canadian products remain lower than on ours for years to come."

More pending deals
The US-Colombia FTA is one of three that are pending approval by Congress. Agreements with South Korea and Panama also have been awaiting action for more than three years. Panama also recently finalized an FTA with Canada, and South Korea is nearing completion on a deal with the European Union, so those markets are also in jeopardy of being lost to competitors.